China Security Co. Ltd. – A Surge of Performance Amid a Turbulent Market

China Security Co. Ltd. (stock code 600654) has delivered a startling performance in the first nine months of 2025, as revealed in its quarterly report released on 30 October 2025. The company reported revenue of 23.65 billion CNY, up 15.84 % year‑on‑year, while its net profit attributable to the parent company jumped an astronomical 1,748.16 % to 1.98 billion CNY. This explosive growth, achieved in an industry that has long been plagued by over‑capacity and thin margins, is a clear signal that China Security’s strategic pivot into emerging technologies is bearing fruit.

1. A New Revenue Stream: The Artificial‑Intelligence Computing Center

On 26 July 2024, China Security signed a partnership with Yixing Xingyang Industrial Investment Co., Ltd. to jointly build an artificial‑intelligence computing center in Yixing City. The project, announced on 12 November 2024 via the Interactive Platform, positions the company at the forefront of the “smart‑city” infrastructure revolution. By diversifying into high‑value services such as AI‑driven analytics and edge computing, China Security mitigates the volatility inherent in traditional security hardware sales.

2. Dominance in Overseas Security Operations

More than 60 % of the company’s revenue—64.82 % to be precise—comes from overseas security operations. The firm provides armed escort, security technology, and manpower services to banks, airlines, and public facilities across Hong Kong, Macau, Thailand, and Oceania. This international footprint not only buffers China Security against domestic regulatory swings but also locks in stable, long‑term contracts with high‑profile clients.

3. Market Response: Breaking the Five‑Day Moving Average

Despite the Shanghai Composite Index dipping below its five‑day moving average on 31 October 2025 (3966.25 points, down 0.52 %), China Security’s shares surged past their five‑day average, registering a 9.88 % gain and a 6.71 % turnover rate. The stock’s price deviation (乖离率) was 6.97 %, placing it among the top performers of the day. The rally culminated in a limit‑up—the highest price the market will allow for the day—an event China Security has achieved 12 times over the past year.

4. Fundamental Discrepancies

While the company’s headline earnings suggest robust profitability, the P/E ratio remains an anomaly: –3,610. This figure indicates that the market still views China Security with extreme caution, possibly due to:

  • Liquidity concerns: The company’s market cap of 9.35 billion CNY is modest relative to its revenue size, suggesting limited market depth.
  • High valuation of non‑cash assets: A significant portion of the revenue comes from service contracts, which may inflate earnings figures compared to tangible asset valuations.
  • Regulatory uncertainty: The company operates in sensitive security sectors that are subject to tight government oversight, potentially limiting future growth.

5. The Bottom Line

China Security Co. Ltd. has delivered a remarkable turnaround, turning a traditionally low‑margin industry into a high‑growth venture through strategic diversification into AI computing and robust overseas operations. The company’s ability to break the five‑day moving average and trigger a limit‑up, even as the broader market weakens, demonstrates its strong internal dynamics and resilient customer base.

However, investors must weigh these positive signals against the starkly negative P/E ratio and the inherent risks of operating in a heavily regulated sector. The company’s future performance will hinge on its capacity to sustain service‑based revenue, navigate regulatory landscapes, and convert its technological innovations into scalable, profitable models.